The Insurance Regulatory and Development Authority of India (IRDAI) on December 18, 2025, issued the consultation on insurer’s investment in infrastructure special purpose vehicles (SVPs).
The Government of India has prioritized infrastructure development as a key growth driver and an enabler of Vision 2047, supported by increased capital expenditure in recent Union Budgets. IRDAI investment regulations already accord priority to infrastructure through mandatory minimum investment limits. Additionally, recent RBI guidelines allow regulated entities to provide Partial Credit Enhancement (PCE) to bonds issued by corporates and infrastructure SPVs, improving their credit ratings and access to bond markets.
Recognizing that infrastructure projects become less risky once they commence commercial operations—with predictable and stable cash flows—it is proposed to further facilitate insurers’ investments in such SPVs, without requiring parent company guarantees, net worth, or ratings.
Proposed Regulatory Provision:
A new provision is proposed to be added after the Note IV of the clause 8 of Schedule III of IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 which reads as below: “IV(a): Notwithstanding the provisions mentioned in the note IV above, Insurers are allowed to invest a maximum 20% of the debt issued by Public Limited Special Purpose Vehicle engaged in infrastructure sector and where project has commenced commercial operation and cash flows have stabilized, or amount under clause 8(2)(a), whichever is lower, as a part of Approved Investments, provided:
i. the proceeds of the issue are utilized to refinance the existing debt/loan of SPV;
ii. the debt/loan is treated as standard in the books of the lender;
iii. the debt issued shall have minimum credit rating of AA.
IRDAI has invited stakeholder comments on:
• Adequacy of the proposed provision to support viable infrastructure SPV funding structures.
• Necessary disclosures to ensure effective risk mitigation.
• Any additional suggestions or feedback.
Comments are to be submitted within 21 days from circulation to Mr. Manish Misra, AGM at [email protected]. and Dr. Ravinder Kaur, DGM at [email protected].
[Notification No.- IRDAI/INV/CIR/08/2024-25/01]
